Originally Posted by
QRC3288
Actually, to nit pick here but it matters....mileage redeemed ARE translated into accounting revenue which falls to earnings. Although you are correct it's not (consolidated) cash flow, but generally mgmt incentives are tied to earnings not cash flow. And earnings is an accounting concept, and it indeed gets larger with mileage bookings.
They also care about public print things like yields. I am not sure where mileage yields vs cash upgrade yields will fall but overall neither is very high yielding IMO.
Again this all matters accounting-wise, but points and miles, to put it in layman's terms, are the airlines printing money themselves, give it out, and flyers can redeem them back. It is earnings that airlines offer themselves out of their pocket as IOU, which after redemption of these IOUs in reality doesn't really earn them anything (a good accounting system actually will and should reflect that).
Cash intake on the other hand is 100% pure solid revenue. Again, a good and solid accounting system should let the management realize this when they see the big picture.